Dollar Resuming Rally as Focus Turns to Non-Farm Payrolls
Action Insight Daily Report 7-2-21

Dollar Resuming Rally as Focus Turns to Non-Farm Payrolls

Dollar's rally resumes after brief consolidation as focus now turns to non-farm payroll report. While some Fed officials might sound optimistic on their expectation on tapering later this year, it's certain that Fed won't move unless upbeat outlook is realized in economic data. Successive solid job growth for a few months is needed to give them the confidence that recovery is already on solid ground. As we're approaching the end of the week, Dollar is currently the strongest, followed by Yen and Euro. Australian Dollar is worst performing, followed by New Zealand and Canadian.

Technically, Dollar's momentum is so far solid against Euro, Sterling, Aussie and Swiss Franc. In particular, USD/JPY is now inside key resistance zone around 111/112. Sustained break there will carry larger bullish implications. USD/CAD is lagging behind others. We'd like to see USD/CAD breaking through 1.2485 resistance sooner rather than later to affirm the overall near term bluishness in the greenback.

In Asia, Nikkei closed up 0.27%. Hong Kong HSI is down -1.93%. China Shanghai SSE is down -1.93%. Singapore Strait Times is up 0.08%. Japan 10-year JGB yield is up 0.0079 at 0.048. Overnight, DOW rose 0.38%. S&P 500 rose 0.52%. NASDAQ rose 0.13%. 10-year yield rose 0.037 to 1.480.

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USD/JPY Daily Outlook

Daily Pivots: (S1) 111.17; (P) 111.40; (R1) 111.78; More...

No change in USD/JPY's outlook and intraday bias stays on the upside for 111.71 resistance. Sustained break there will carry larger bullish implication. Next target is 61.8% projection of 102.58 to 110.95 from 107.47 at 112.64. On the downside, below 111.10 minor support will turn intraday bias neutral first. But break of 110.41 support is needed to indicate short term topping. Otherwise, outlook will stay bullish in case of retreat.

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
23:50 JPY Monetary Base Y/Y Jun 19.10% 24.30% 22.40%
9:00 EUR Eurozone PPI M/M May 1.20% 1.00%
9:00 EUR Eurozone PPI Y/Y May 9.50% 7.60%
12:30 CAD Building Permits M/M May -0.50%
12:30 CAD Trade Balance (CAD) May 0.6B
12:30 USD Nonfarm Payrolls Jun 675K 559K
12:30 USD Unemployment Rate Jun 5.60% 5.80%
12:30 USD Average Hourly Earnings M/M Jun 0.40% 0.50%
12:30 USD Trade Balance (USD) May -71.0B -68.9B
14:00 USD Factory Orders M/M May 1.40% -0.60%